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Pirated Microsoft software, estimated by the firm to be worth more than $2bn, has been seized by the US Federal Bureau of Investigation (FBI) and Chinese police following a long-running joint operation which began in 2005.

A network of Chinese pirating syndicates, believed to be the largest of its kind in history, had been making and flogging counterfeit software in the US, the UK, and around the world.

The FBI and China's Public Security Bureau (PSB) confirmed today that following several raids in the southern China province of Guangdong, 25 arrests had been made.

Microsoft said it played a key role in the investigation, with partners and customers turning in more than 55,000 "sophisticated copies" of software to the firm.

Although the OS features a new "reduce functionality mode" which is intended to prevent pirates from fingering the product, Vista's inclusion in the syndicate's bounty could ruffle some feathers at Microsoft.

Microsoft's UK anti-piracy head Michala Alexander told The Register the Chinese counterfeit ring had attempted to hack into the 30-day failsafe technology which determines whether the software's key is genuine or illegal.

She said resellers in the UK had been selling pirate copies and explained that while it was "difficult to tell the difference", firms were "putting their businesses at risk" by using the unauthorised software.

"From a reseller perspective they know what to do," said Alexander, who also told us "the UK economy is suffering because of it".

According to Reuters, the FBI estimated that the pirated software it had seized had a retail value of $500m, a figure significantly lower than that claimed by Microsoft.

Microsoft said although the 55,000 seized copies would put a sizeable dent in the criminal activity surrounding its products, it represented less than one per cent of counterfeit copies of its software being sold around the world.

Brad Smith, senior vice president and general counsel at Microsoft, said: "This case represents a milestone in the fight against software piracy - governments, law enforcement agencies, and private companies working together with customers and software resellers to break up a massive international counterfeiting ring.

"This case should serve as a wake-up call to counterfeiters. Customers around the world are turning you in, governments and law enforcement have had enough, and private companies will act decisively to protect intellectual property." ®